Old School

From 1996 - 2006 a great transition happened.

As e-commerce took hold, customers shifted behavior. Behavior shifted in two ways.

1. Customers who used to call the contact center to place an order with a sales associate instead ordered online. If you ran a contact center back in the day, these were depressing times.
2. Different customers purchased ... customers who didn't focus on old-school channels bought online. They behaved differently, as well.

The latter point was always a fascinating one.

In the early days of e-commerce at Eddie Bauer, we performed demographic studies of who was buying online ... way back then the core customer had shifted from an outdoor enthusiast to a women's apparel buyer (that fact alone transformed the brand in unrecognizable ways) ... but the customer buying online skewed to men, maybe toward technology enthusiasts. They bought from a different portion of our assortment. They didn't interact with our catalog. And most importantly ...

• Their long-term value appeared to be significantly less than the core customer buying from traditional channels.

This pattern, this "old school" pattern of new channels yielding customers with lower long-term value than the core brand repeats over and over again.

• 1994:  New customers purchasing from specialty catalogs (i.e. a Home catalog within an Apparel brand) were worth less than new customers from the core brand.
• 1996 - 2006:  New customers purchasing via e-commerce were worth less than new customers acquired via catalog or stores.
• 2006 - 2011:  New customers acquired via search were worth less than new customers acquired via email or direct load.
• 2011 - 2016:  New customers acquired via social were worth less than new customers acquired via search.

Here we are, late in 2024, and the tradition continues ... it's appearing via new merchandise. When you offer new products, customers in different channels embrace new products/merchandise, with the change in assortment often delivering customers who are less valuable than the core customer buying from the core assortment. On the surface, this analysis suggests to "stick to the basics" ... keep doing what you've always done, keep selling what you've always sold.

And yet ... history tells us the opposite ... that in the short-term, anything new you try is not likely to work, and if it appears to work in the short-term it might not work in the long-term ... and then whatever you do becomes "normal".

Always be willing to be patient with anything "new".

Have You Ever Looked At Performance This Way?

I bring this up annually. But the analysis is so darn much fun!

Take every customer who purchased between Black Friday and Cyber Monday last year, and measure if/when these customers purchase again.

What is fun about this analysis?

You might learn that these are your best customers, and this purchase improves recency/frequency, giving the customers "file power" that fuels sales in January/February/March. I've seen this happen.

You might learn that these customers become dormant until next year's Black Friday / Cyber Monday event. If you learn that, you are blessed ... you don't have to waste marketing dollars on these customers.

You might learn these customers buy all-year, and all you've done is give away $30 of gross margin per customer. You lost money trying to please trade journalists and boutique agency thought leaders.

Regardless, you are going to learn something unique and interesting ... and you'll be able to do something fun in response, making more profit for you business.